Third Wave Rum Part 2

This is the second of two pieces about something we’re calling “Third Wave Rum.”

We started Part 1 off with a few light jabs at woke consumerism and the moral and gastronomic superiority of cashing in on the “right” kind of ethical product or business. We’re in the Bay Area, arguably the richest territory in the country for lampooning self-righteous foodie tropes, so we think a few jabs are fair game.

Full disclosure, though? We’re just as starry-eyed and idealistic as the next small food entrepreneur, peddling ethical consumerism as a salve for what ails the world. The idea that Third Wave Coffee might light the way for a new era of rum consumerism—an era driven by transparency, ethics, and equity—gets us hot and bothered! Third Wave Coffee has all the hallmarks of super-dorky, super-premium spirits: a focus (a fetish, even) on raw materials and process, rigorous treatment of intrinsic values like flavor and aroma, and valorous claims of authenticity and terroir. Why wouldn’t we want a Third Wave for rum?

But, as they say, there’s many a slip twixt the cup and the ethical supply chain.

Conscious consumers can be an important part of building more equitable wealth distribution along global supply chains. But there are also some very real problems with the Third Wave model.

The problem with Third Wave

For starters, while Second Wave (Peet’s, et al) and Third Wave (Blue Bottle, et al) trends in coffee both propose ditching the laissez-faire anonymity of First Wave (Folgers, Maxwell House, etc.) in favor of a more refined consumer experience, these business models rely heavily on consumer choice, localism, entrepreneurialism, and self improvement even as they enjoy the marketing and product quality benefits of more direct imports.

Great! Doesn’t that just mean we’re bringing a Third Wave American Dream to the coffee growers of the global south?

Actually, it’s neoliberalism, the political and economic ideology that relies heavily on Western notions of individualism as a path to economic freedom (think boot-strapping, rags-to-riches, and the American Dream), while ignoring systemic factors that make such upward mobility unattainable for most folks. For Third Wave Coffee, this includes the 44% of small-scale coffee farmers who live in poverty worldwide. From the consumer point of view, it’s a far cry from Folgers, but from the producer standpoint Third Wave is not only just more of the same, it can actually be worse.

It turns out woke consumerism isn’t enough. We need woke supply chain management to keep value from accumulating only on the consumer side.

Soft power and supply chains

Value accumulation at the retail side isn’t the only issue. Vanderbilt University Professor of Anthropology Edward Fischer, quoting economic anthropologist and activist David Graeber, points out that “power comes not only from accumulating value within a system but also from defining what constitutes value for that system” (Fischer 2021). So, a Third Wave coffee brand's success isn’t just because they own their signature symbolic and affective value-adds (see Part 1 for more on value spheres), they also play a role in creating them in the first place.

Third Wave coffee created a new market around consumer interest in smallholder farmers and terroir—a new and marketable symbolic value. Unfortunately for Third Wave growers,  this often devolves into a self-fulfilling valuation of “poverty and primitivity…with consumers imagining that they are contributing to farmers’ dreams of a better life…[or] making other people’s lives better through the act of buying” (Fischer 2021).

Intimately connected to the consumer market, Third Wave brands can play tastemaker, creating new value spheres as the market evolves. This leaves Third Wave growers at the mercy of shifting value systems (trends) and the resulting fluctuations in price.

The problem with rum

Coffee and rum have similar product life cycles: a raw material is grown and harvested, then undergoes a fermentation pre-process to become the feedstock for a processing plant before packaging and distribution. But dig a little deeper and you find some key technical and economic differences between rum and coffee.

Depending on location, volume, and local regulations, it’s most likely way more expensive to open a distillery than it is to open a roasting plant—millions of dollars more expensive, (Bellwether Coffee n.d.; Minnick n.d.). Along with being more capital intensive, distilleries also represent a larger concentration of value in the supply chain as raw materials are converted into saleable units (bottles) of product.

Consider a ton of bulk sugarcane and a ton of bulk specialty coffee beans making their way from producer to consumer. One ton of cane costs the distiller around $1000 and yields around $5000 for the batch (200 bottles at $25 to retail)—gaining 5X in gross value as it moves through the distillery, on a timescale of 1-5 years. One ton of green specialty coffee beans, on the other hand, costs the roaster about $6000, and yields somewhere around $11,050 for the batch (850 1-pound bags at $13 to retail). It happens faster than rum, but there’s not even 2X value gained at the roastery.

The problem with molasses

Capital and value concentration notwithstanding, most rum sold around the world is made from molasses—and this is the biggest problem with rum. Molasses is the sticky brown commodity that keeps rum close to the sugar industry, and to centuries of extractive colonial economics.

Rum began as a margin-padding revenue stream from waste molasses produced by colonial sugar refineries. Sidney Mintz refers to the business of growing cane for sugar as “agro-industrial”—cane juice spoils quickly, so the industrial plant had to be located close to the cane fields, and both operations were often under ownership of the same plantation. Plantations needed a large and varied workforce, from highly skilled process managers in the refinery to relatively unskilled cane cutters in the fields. As rum’s popularity increased across the developing colonial economies, the industrial side of the operation often grew to include molasses fermentation and distillation, along with more skilled operators. Colonial production of rum, refined sugar, and molasses were subsidized through the practice of slavery.

Modern commodity molasses and refined sugar are produced and traded around the world, with India, Thailand, Brazil, and even the US among the top exporters (Caribbean countries export relatively little). Modern sugarcane agriculture and refining is more efficient compared to colonial plantation methods, but the process and proximity between plant and field remains the same. Sugarcane is also still very labor intensive, still mostly grown in the global south, and there isn’t much supply chain transparency in the global commodity molasses market.

As such, it’s difficult to see how a Third Wave symbolic value like terroir could survive for long in molasses-based rum markets, and agri-food activist trade practices like Fairtrade and organic certifications are nearly impossible.

The colonial spin on modern rum

Another challenge to a burgeoning Third Wave in rum is the industry’s persistently colonial symbolic value language (case in point: the inaccurate obsession with 17th century rum-swilling privateers). The durability of the colonial economic model in global supply chains plays no small part here. Rum’s symbolic value sphere is dependent on exotic fantasy and, at best, a rich landscape of tropical terroir. At worst, blatant appropriation and offensive content still gets a pass (Marcelin, 2021). Since retail markets in the global north (former colonial power centers) still drive most of the industry, the point of view looking back along the supply chain, unsurprisingly, tends to be overwhelmingly white, privileged, and obsessed with pirates (Bossart 2021; Wondrich 2017).

Where Third Wave coffee marketing can go as far as to embrace social justice and supply chain equity, these discussions are mostly absent from rum, with the exception of recent interest in Black spirits brand ownership. Rum, like coffee, is an agricultural product, but people who grow sugarcane are not part of the retail consumer’s experience the way coffee growers are associated with an expensive pour-over.

This disconnect between rum and its means of production is not accidental. Professor Elizabeth Hoeim, who studies children's literature and material culture at the University of Illinois at Urbana-Champaign, notes that since the beginning of the colonial sugar trade, marketing in the form of childrens’ books and other collateral deliberately focus on “technological utopianism” to celebrate trade, empirical power, and the sale of luxury goods, all while deflecting attention away from the human costs of such luxuries (Hoiem 2021). The narrative “promises effortless plenty—the end of scarcity and work—by deflecting attention from the people that use tools and machines, just as nostalgic depictions of antebellum America hide the exploitation of Black slave labor that supports white leisure.”

Could Third Wave rum survive its own conflicting impulses for "poverty and primitivity" on the one hand and deliberate ignorance of the labor of sugarcane on the other?

The rum industry can’t shake these marketing fictions either, by the way. In her essay, “‘Been to Barbados’: Rum (Bullion), Race, The Gaspée and the American Revolution,” Eva-Sabine Zehelein describes a 2013 ad campaign from one of the world’s top rum brands which, “...reveals an iconography in variations of amber and provides the viewer with a variety of essential ingredients of how rum wants to see itself. The setting is sunshine or a sunset on the white sands of a Caribbean beach, palm trees, water and the planks of a sailing vessel…amber and golden hues dominate the affective experience…we are supposed to long for that beach” (Schmid and Schmidt-Haberkamp 2014).

As a category, rum is just as geographically, culturally, and aesthetically diverse as wine, whiskey, or beer. Why must we always default to reductive tropicalism?

Third wave and the case for cane juice rum

Unlike molasses, cane juice is easy to trace to its source (more likely than not, it’s next door to the distillery). Traceability is baked into this supply chain.

An added benefit to cane juice rums is that they taste great! They tend to have more character, more nuance, and more funk. West Indies Rum and Spirits Producers' Association (WIRSPA) Community Envoy Matt Pietrek and his partner/co-author Carrie Smith point out in their book, Modern Caribbean Rum, “Molasses production inherently strips away much of the region’s terroir. It’s much easier to exhibit a distinctive terroir from locally grown sugarcane than from molasses that originated halfway around the globe” (Pietrek and Smith, 2022). What better way to enhance Third Wave Rum’s relationship to its place (and people) of origin than by emphasizing terroir?

And what better way to kick off a Third Wave of rum than by looking to domestic production. Did you know we're already growing cane on a global scale right here in the U.S.? Florida, Louisiana, Texas, and Hawaii account for more than 15% of global sugarcane output, currently mostly for refined sugar production, but all of it subject to US labor laws. Granted, Big Ag has plenty of shortcomings when it comes to labor, but at least there’s a federal framework for accountability. That’s a far sight closer to ethical raw materials sourcing than having to rely on commodity molasses markets.

Third Wave rum manifesto

Third Wave Rum is coming. It’s not a matter of “if,” but “when.” American Cane Juice Rum seems poised to propel the trend into mainstream success, maybe even joining American Single Malt as a premier domestic spirits category to challenge the Bourbon Boom.

The obvious question here is, “now what”? We’ve explored the successes and failures of Third Wave coffee. We’ve assessed the rum supply chain using a Third Wave framework. We’ve identified a set of parameters that define the Third Wave category. How do we make this a reality?

Here’s where the rubber hits the road, where ideological dreaming meets real-world action. Third Wave Rum needs parameters:

1. Cane juice is key. The need for a traceable, ethically-trending supply chain that exists outside of massive commodity markets demands that Third Wave Rum is cane juice rum. We’re not saying molasses rum is bad, nor is it impossible to imagine a Third Wave molasses-based rum. We are just saying that in a Third Wave market, it won’t make much economic sense to make molasses before you make rum. Just make rum!
2. Support a living wage. Shift raw materials valuation and downstream final product margins to support dignified incomes.
3. Encourage equitable vertical integration on the production side. Agro-industrial operations are more profitable when both sides of production are under one roof. Encourage ownership and governance of distilleries by farmers through employee ownership, cooperatives, and other economics of participation.
4. Encourage governance in retail markets by producer-owner organizations. Support price transparency and grower/producer knowledge of downstream market trends to not only increase participation in the market, but also to extend to grower/producers the ability to manipulate and create new market value spheres as the category evolves.
5. Increase domestic consumption. Get more people interested in Third Wave Rum, demonstrate sustained market share growth, and send a demand signal to the industry.
6. Tell the real story of rum. Many consumers don’t know the difference between the basic categories and origins of rum, let alone rum's rich and terrible history. Support new consumer entry into the category by telling the real story of rum. People are smart, give them the real story, not the short-sighted utopian dreamscape.
7. Work towards official category recognition. Understand and follow the American Single Malt blueprint for achieving federal status for American Cane Juice Rum as a beverage category.
   

Note: a lot of the content in this email series was inspired by work done by the Specialty Coffee Association (SCA) to map and understand the coffee supply chain and thereby help to insulate growers and other small stakeholders from damaging global market shifts (Specialty Coffee Association 2019).

Sources

Bellwether Coffee. n.d. “How to Start a Profitable Roasting Business.” Accessed April 23, 2023. https://bellwethercoffee.com/blog/how-to-start-a-profitable-roasting-business/.

Bossart, Céline. 2021. “Decolonizing the Whitewashed World of Caribbean Rum.” n.d. Liquor.Com. Accessed April 23, 2023. https://www.liquor.com/decolonizing-rum-industry-5117059.

Fischer, Edward F. 2021. “Quality and Inequality: Creating Value Worlds with Third Wave Coffee.” Socio-Economic Review 19 (1): 111–31. https://doi.org/10.1093/ser/mwz044.

Hoiem, Elizabeth Massa. 2021. “The Progress of Sugar: Consumption as Complicity in Children’s Books about Slavery and Manufacturing, 1790–2015.” Children’s Literature in Education 52 (2): 162–82. https://doi.org/10.1007/s10583-020-09411-y.

Minnick, Fred. n.d. “Want To Start A Distillery? Read This.” Forbes. Accessed April 23, 2023. https://www.forbes.com/sites/fredminnick/2018/10/26/want-to-start-a-distillery-read-this/.

Mintz, Sidney W. 1986. Sweetness and Power: The Place of Sugar in Modern History. Penguin Publishing Group.

Marcelin, Nicki. 2021. “Open Letter to La Maison and Velier.” n.d. SPILL. Accessed March 1, 2023. https://www.readspill.com/articles/open-letter-to-lmv.

Pietrek, Matt, and Smith, Carrie. 2022. Modern Caribbean Rum. Wonk Press.

Schmid, Susanne, and Barbara Schmidt-Haberkamp, eds. 2014. Drink in the Eighteenth and Nineteenth Centuries. Perspectives in Economic and Social History, no. 29. London ; Brookfield, VT: Pickering & Chatto.

Specialty Coffee Association. 2019. “Price Crisis Response Initiative Summary of Work.” December 2019. Report link.

Wondrich, David. 2017. “The Rum-Soaked History of Pirates & Sailors.” The Daily Beast, July 29, 2017, sec. half-full. https://www.thedailybeast.com/the-rum-soaked-history-of-pirates-and-sailors.